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Business Dynamics Statistics for Single-Unit Firms
December 2022
Working Paper Number:
CES-22-57
The Business Dynamics Statistics of Single Unit Firms (BDS-SU) is an experimental data product that provides information on employment and payroll dynamics for each quarter of the year at businesses that operate in one physical location. This paper describes the creation of the data tables and the value they add to the existing Business Dynamics Statistics (BDS) product. We then present some analysis of the published statistics to provide context for the numbers and demonstrate how they can be used to understand both national and local business conditions, with a particular focus on 2020 and the recession induced by the COVID-19 pandemic. We next examine how firms fared in this recession compared to the Great Recession that began in the fourth quarter of 2007. We also consider the heterogenous impact of the pandemic on various industries and areas of the country, showing which types of businesses in which locations were particularly hard hit. We examine business exit rates in some detail and consider why different metro areas experienced the pandemic in different ways. We also consider entry rates and look for evidence of a surge in new businesses as seen in other data sources. We finish by providing a preview of on-going research to match the BDS to worker demographics and show statistics on the relationship between the characteristics of the firm's workers and outcomes such as firm exit and net job creation.
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Rising Markups or Changing Technology?
September 2022
Working Paper Number:
CES-22-38R
Recent evidence suggests the U.S. business environment is changing, with rising market concentration and markups. The most prominent and extensive evidence backs out firm-level markups from the first-order conditions for variable factors. The markup is identified as the ratio of the variable factor's output elasticity to its cost share of revenue. Our analysis starts from this indirect approach, but we exploit a long panel of manufacturing establishments to permit output elasticities to vary to a much greater extent - relative to the existing literature - across establishments within the same industry over time. With our more detailed estimates of output elasticities, the measured increase in markups is substantially dampened, if not eliminated, for U.S. manufacturing. As supporting evidence, we relate differences in the markups' patterns to observable changes in technology (e.g., computer investment per worker, capital intensity, diversification to non-manufacturing) and find patterns in support of changing technology as the driver of those differences.
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Structural Change Within Versus Across Firms: Evidence from the United States
June 2022
Working Paper Number:
CES-22-19
We document the role of intangible capital in manufacturing firms' substantial contribution to
non-manufacturing employment growth from 1977-2019. Exploiting data on firms' 'auxiliary' establishments, we develop a novel measure of proprietary in-house knowledge and show that it
is associated with increased growth and industry switching. We rationalize this reallocation in a
model where irms combine physical and knowledge inputs as complements, and where producing
the latter in-house confers a sector-neutral productivity advantage facilitating within-firm structural
transformation. Consistent with the model, manufacturing firms with auxiliary employment pivot towards services in response to a plausibly exogenous decline in their physical input prices.
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A Long View of Employment Growth and Firm Dynamics in the United States: Importers vs. Exporters vs. Non-Traders
December 2021
Working Paper Number:
CES-21-38
The first experimental product from the U.S. Census Bureau's Business Dynamics Statistics (BDS) program -- BDS-Goods Traders -- provides annual, public-use measures of business dynamics by four mutually exclusive goods-trading classifications: exporter only, importer only, exporter and importer, and non-trader. The BDS-Goods Traders offers a comprehensive view of employment growth at firms associated with goods trading activities in the United States from 1992-2019. We highlight three patterns. First, employment is skewed towards goods traders in several ways. Only 6% of all U.S. firms are goods traders but they account for half of total employment. Moreover, 80% of large firms and 70% of older firms are goods traders. Second, exporter-importer firms represent 70% of manufacturing employment and over half of employment in services-producing industries (management, retail, transportation, utilities, and wholesale). Third, goods-traders exhibit higher net job creation rates than non-traders controlling for firm size, age, and sector. Goods traders contribution to total job creation grows over time, rising to more than half after 2008.
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Comparing Earnings Outcome Differences Between All Graduates and Title IV Graduates
August 2021
Working Paper Number:
CES-21-19
Recently, two public data products have been released that publish earnings outcomes for college graduates by program of study and institution: Post-Secondary Employment Outcomes and College Scorecard, from the Census Bureau and U.S. Department of Education, respectively. While the earnings data underlying the data products is similar, persons eligible for the frames of the two products is different, with College Scorecard restricted to only students that receive Title IV aid. This paper documents how these differences in the population studied affect the published earnings outcomes. I show that at an institution, of the institutions in my sample, an average of sixty percent of baccalaureate graduates receive Title IV aid, and that the lower the coverage, the large the difference in earnings measurement. Additionally, I show that short-run earnings outcomes are very similar for these two samples, while longer-run outcomes (10 years after graduation) are significantly lower for the Title IV population. I also show that program ranking can change significantly when considering the Title IV population rather than the entire graduate population.
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Immigration and Local Business Dynamics:
Evidence from U.S. Firms
August 2021
Working Paper Number:
CES-21-18
This paper finds that establishment entry and exit'particularly the prevention of establishment exit'drive immigrant absorption and immigrant-induced productivity increases in U.S. local industries. Using a comprehensive collection of confidential survey and administrative
data from the Census Bureau, it shows that inflows of immigrantworkers lead to more establishment entry and less establishment exit in local industries. These relationships are responsible for nearly all of long-run immigrant-induced job creation, with 78 percent accounted for by exit prevention alone, leaving a minimal role for continuing establishment expansion. Furthermore, exit prevention is not uniform: immigrant inflows increase the probability of exit by establishments from low productivity firms and decrease the probability of exit by establishments from high productivity firms. As a result, the increase in establishment count is concentrated at the top of the productivity distribution. A general equilibrium model proposes a mechanism that ties immigrantworkers to high productivity firms and shows how accounting for changes to the firm productivity distribution can yield substantially larger estimates of immigrant-generated economic surplus than canonical models of labor demand.
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Business Formation: A Tale of Two Recessions
January 2021
Working Paper Number:
CES-21-01
The trajectory of new business applications and transitions to employer businesses differ markedly during the Great Recession and COVID-19 Recession. Both applications and transitions to employer startups decreased slowly but persistently in the post-Lehman crisis period of the Great Recession. In contrast, during the COVID-19 Recession new applications initially declined but have since sharply rebounded, resulting in a surge in applications during 2020. Projected transitions to employer businesses also rise but this is dampened by a change in the composition of applications in 2020 towards applications that are more likely to be nonemployers.
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Determination of the 2020 U.S. Citizen Voting Age Population (CVAP) Using Administrative Records and Statistical Methodology Technical Report
October 2020
Authors:
John M. Abowd,
J. David Brown,
Lawrence Warren,
Moises Yi,
Misty L. Heggeness,
William R. Bell,
Michael B. Hawes,
Andrew Keller,
Vincent T. Mule Jr.,
Joseph L. Schafer,
Matthew Spence
Working Paper Number:
CES-20-33
This report documents the efforts of the Census Bureau's Citizen Voting-Age Population (CVAP) Internal Expert Panel (IEP) and Technical Working Group (TWG) toward the use of multiple data sources to produce block-level statistics on the citizen voting-age population for use in enforcing the Voting Rights Act. It describes the administrative, survey, and census data sources used, and the four approaches developed for combining these data to produce CVAP estimates. It also discusses other aspects of the estimation process, including how records were linked across the multiple data sources, and the measures taken to protect the confidentiality of the data.
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The Modern Wholesaler: Global Sourcing, Domestic Distribution, and Scale Economies
December 2018
Working Paper Number:
CES-18-49
Nearly half of all transactions in the $6 trillion market for manufactured goods in the United
States were intermediated by wholesalers in 2012, up from 32 percent in 1992. Seventy percent of this increase is due to the growth of 'superstar' firms - the largest one percent of wholesalers. Structural estimates based on detailed administrative data show that the rise of the largest wholesalers was driven by an intuitive linkage between their sourcing of goods from abroad and an expansion of their domestic distribution network to reach more buyers. Both elements require scale economies and lead to increased wholesaler market shares and markups. Counterfactual analysis shows that despite increases in wholesaler market power, intermediated international trade has two benefits for buyers: directly through buyers' valuation of globally sourced products, and indirectly through the passed-through benefits of wholesaler economies of scale and increased quality.
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Hiring through Startup Acquisitions:
Preference Mismatch and Employee Departures
September 2018
Working Paper Number:
CES-18-41
This paper investigates the effectiveness of startup acquisitions as a hiring strategy. Unlike conventional hires who choose to join a new firm on their own volition, most acquired employees do not have a voice in the decision to be acquired, much less by whom to be acquired. The lack of worker agency may result in a preference mismatch between the acquired employees and the acquiring firm, leading to elevated rates of turnover. Using comprehensive employee-employer matched data from the US Census, I document that acquired workers are significantly more likely to leave compared to regular hires. By constructing a novel peer-based proxy for worker preferences, I show that acquired employees who prefer to work for startups ' rather than established firms ' are the most likely to leave after the acquisition, lending support to the preference mismatch theory. Moreover, these departures suggest a deeper strategic cost of competitive spawning: upon leaving, acquired workers are more likely to found their own companies, many of which appear to be competitive threats that impair the acquirer's long-run performance.
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